Aboutleboyd Expertise I can answer questions relating to life insurance, estate planning, business succession/continuity planning and tax-effecient retirement planning. I have advised clients for many years on these areas, and how they relate to life insurance.
Likewise, I have worked with many on Long-Term Care needs.
Experience I have been a top producer for the past 5 years. Prior to that I was the CEO of an international company, having the concerns from a clients perspective (now having been a client of NYL for more than 15 years)
Organizations Society of Financial Services Professional
Million Dollar Round Table
Education/Credentials In addition to an BBA and an MBA from a top-10 school. I have earned the LUTCF, NASD Series 6, 7, 63 and 66 licenses.
Awards and Honors Top Life Producer
Top Long-Term Care Producer
After reading some of your answers, I am quite impressed with your knowledge. I have a question in regards to the differences of an Index Universal Life and a Universal Life. My parents are 55 years old and are looking for a Permanent Insurance that will last them for life. They do not want term, because they can only get a 20 year term because they are over 50. What would be the advantages and disadvantages of having an IUL or a UL? What would be more expensive to have? Up to what ages do they have to pay the policy in order for the policy to maintain itself w/out paying anymore? Will the total cumulative payments be higher than the cash value?
Thank you for your time!
Anthony
Answer Anthony,
Thank you for your complement.
Why, lots of questions there :)
Let's start with some of your statements:
- 55 years old (I assume in good health)
- want insurance for their whole life
- want to pay for a while and then have the policy without paying any more
- want some cash value
Here are some of the questions I would ask back:
- What amount of death benefit do you want now?
- is the the same amount you want at death in 40 years? (do you want more or less?)
- what do you expect your budget to be and for how many years?
You mention IUL and UL, but you don't mention VUL or WL. Any particular reason?
An IUL is kind of a mix between a UL and a VUL. It has a minimum interest rate, like a UL (VUL does not) but has a possibility of a higher return based on the market like the VUL. The difference between the VUL and IUL is that with the VUL you choose the investments, you don't have a minimum return (except for any cash value invested in the fixed rate) but you also don't have a cap on your rate of return.
IULs were created by insurance companies who had agents that were only insurance agents and not SEC/FINRA licensed agents. "insurance agents" can only sell fixed-rate insurance and annuity policies. Currently (although the government is probably going to change this soon), IUL are technically "fixed rate policies". Through this creation, the "insurance agent" and insurance company could compete with variable products.
You have to really read the fine print on the IUL, especially where it discusses the fees within the policy and the cap. The key to remember is that the underlying insurance on all ULs (UL, IUL, VUL) is term insurance. You have to make sure the cash value grows quick enough in the early years of the policy to cover the costs in the later years.
Also, make sure you really check the financial ratings of the company before you buy - and check what the ratings mean. It's not like school where a B or A- is a good grade. In the financial ratings industry a B is horrible and an A- isn't much better.
There are 100s of options to solve the basic request, and there may not be one "right answer".
